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Pouring on the Profit: Adding Wine Storage to a Self-Storage Operation

While not ideal for every self-storage business, wine storage can be a successful profit center for those in the right market. Here’s how to weigh your prospects as well as considerations for design, marketing and more.

When Patrick Gilroy and his father began designing their third self-storage facility, The Stor-House in Bellevue, Wash., they were keeping their personal wine collection with a third party. Being unhappy with their experience at that business, the duo decided to add the service to their own development. The idea was to create an unparalleled wine-storage option where they’d be very happy to lodge their bottles.

After some research, they discovered the demographics surrounding their location were perfect for this type of high-end storage. “Woodinville, Wash., is only a short drive north and home to many of Washington state’s premier wineries, so this generates a fair amount of local interest in wine,” Gilroy says.

Nearly a decade later, Wine Storage Bellevue continues to flourish, proving the Gilroys’ decision to be a good one. While not ideal for every self-storage business, this service can be a successful profit center for those in the right market.

The Right Spot

Though wine storage is still relatively rare in self-storage facilities, there’s a bigger market for it than ever. “Wine consumption is on the rise, and people need a place to safely store their wine collections,” says Roy Carroll II, CEO and president of The Carroll Cos., which operates 10 Bee Safe Storage and Wine Cellar facilities in the Carolinas.

While a wine-storage facility doesn’t have to be near a large city or wineries to draw customers, location plays a key role. If there’s no market for the service or it’s already saturated, you’ll wind up with empty lockers. When doing research, consider self-storage facilities and other types of businesses that cater to this niche.

“A good market has a lot to do with demographics and what local wine retailers can tell you about their customers,” says Eric Blum, vice president of BMSGRP Self Storage Consulting, which consulted on the development of Sobe Wine & Self Storage in the historic Flamingo/Lummus neighborhood of Miami Beach, Fla. The area contains a high-end clientele known for its affinity for wine. There are few businesses offering the kind of upscale wine storage Sobe proposed, Blum adds.

Another consideration is local weather. “The hotter the weather and the greater temperature swings from season to season will drive the need for temperature-controlled wine storage,” Gilroy says. Wine collectors will seek a safe, secure alternative to storing their precious vino at home.

“We built our wine-storage room with the advanced wine consumer in mind—someone who loves and cares about wine but doesn’t want to necessarily spend tens of thousands of dollars building a cellar in his own home,” says Chase Davis, head of marketing and research for Citadel Self Storage, which opened Citadel Wine Storage last summer at its new location in St. Matthews, Ky., a suburb of Louisville.

Finally, find out if there are any state or federal regulations to which you must comply. “Determine if there are any regulatory agencies in your facility’s marketplace, such as the local alcohol-control board, and whether or not they require a permit to operate in their jurisdiction,” Gilroy says. “We sought and received a wine-storage permit early on, so we remained in the clear.”

The Right Environment

Bear in mind that adding wine storage can be complex and expensive. Wine requires specific temperature and humidity. “The environment for proper wine storage is a delicate one. You need a place that’ll remain cool with a good humidity; no direct light, vibrations or off odors; and the ability to keep the bottles resting on their sides,” Davis says.

In general, wine needs to be stored at 55 degrees and relative humidity of about 65 percent. An improper temperature will cause the wine to age quicker, while incorrect humidity can affect a bottle’s label and cork. The storage area must have a properly insulated and designed perimeter to prevent air movement and condensation, and a system to monitor temperature and moisture.

“Our biggest challenge was the overall construction of the wine-storage area since it’s such a specialized room. Not many general contractors have experience building wine storage,” Davis says. While designing Citadel, his company enlisted the expertise of a well-known master sommelier in the region.

For Sobe, the greatest hurdle was getting the insulation correct. “We installed six redundant fans, and a temperature and humidity sensor that can be controlled and monitored remotely,” Blum says. The facility also has motion sensors to control the lighting. To help maintain the atmosphere, a vestibule was added. One door is prevented from opening until the first is closed.

The Right Security

Enhanced security is also a major factor in wine-storage design. Some facilities like Sobe require a fingerprint scan to access the wine room. Passcodes and keycards are also popular for restricting entry to wine-storage customers.

Entry to Wine Storage Bellevue is separate from the storage facility. The area has its own moving carts and a custom-designed wooden door straight off the parking lot. “Since access was a big concern, we connected the entry door to a keypad so customers carrying their wine only have to swipe their access card to get in. Plus, customers can get access to the storage area seven days a week, 365 days a year, including holidays when most facilities are closed,” Gilroy says.

The Right Look

To create a relaxed, social setting, many operators will add a lounge or tasting room to their wine-storage area. Many customers of this upscale service may even expect such an amenity. An enchanting countryside mural can be displayed on the exterior to create a unique look. Inside, the room might include wine-inspired décor.

“We designed the hallway to look like a Tuscan grotto to set the customer’s mood before arriving at the storage area,” Gilroy says. “Immediately adjacent to but separate from the storage area is our 1,000-square-foot private event space, available exclusively to Wine Storage Bellevue clients. Dubbed the ‘Amoroso Room,’ it’s handsomely appointed with leather furnishings, a fireplace and a refectory table that seats up to 10 people. We provide glassware, decanters, and all the accoutrement for opening a bottle with friends or a fellow wine-storage customer.”

The Right Marketing

Like any service, wine storage requires dedicated marketing to bring in customers. Your prospects may not actively be seeking a secure environment for their wine, but once they learn of the service, they’ll consider it.

In addition to traditional efforts such as pay-per-click ads and social media posts, Blum encourages operators to meet with local wine vendors and restaurant managers. “We also participate in the local food and wine events,” he says.

Connecting with the community has been a key strategy for Bee Safe. “Our facilities are active members of networking groups and often reach out to local business operators like restaurants that use our wine-storage facilities for securing their valuable wines,” Carroll says. Wine Storage Bellevue reaches out to wine-tasting rooms in the area and explains the facility’s package-acceptance program. The company also focuses on educating customers about the benefits of storing their cherished bottles.

“We’ve become authorities on the subject of wine storage, which is necessary when educating the public on why it would be necessary,” Gilroy says. “Most folks say, ‘I just drink it too fast.’ But what about that bottle you bought for your son or daughter’s 21st birthday, or that bottle or two for other special occasions? Why not have a secure, temperature-controlled place to store it where it is out of sight and out of mind?”

While not as common as retail centers stocked with boxes and tape, or parking spots for boats and RVs, wine storage can be a lucrative profit center for self-storage operators in the right market. “Wine storage is definitely an offering worth exploring. It can give your facility a unique amenity guaranteed to set you apart from your competitors,” Davis says.